Mike Anthony @ engage consultants

Mike Anthony on Shopper Marketing

One Thing You Should Measure To Guarantee An Improvement In Marketing ROI

with 11 comments

I bet this wasn’t how the shelf looked in the plan

In any disciple, one of the most critical steps to understanding what works and what does not is evaluation. It is essential to drive future improvement, and to enable the separation between activity which is a cost and activity which is an investment (something that delivers a return). The vast majority of the work we see in shopper marketing is not evaluated, and that which is, often suffers from ineffective evaluation. Don’t believe me? According to Deloitte’s/GMA “barely half (the companies surveyed) currently use performance data to measure program performance”. And this was a survey of the top 100 companies in the US (arguably the leaders of the field and probably more sophisticated in their evaluations).  The maxim “if it isn’t worth measuring, it isn’t worth doing” holds as true in the store as it does anywhere else.

Even where some efforts are made to evaluate the effectiveness of an activity, I am sometimes shocked by one key element that is missing from many evaluation tools – whether or not the activity was executed as planned. In a response to a previous blog  on going to the store, one poster quoted some statistics from his analysis (in the US and Europe) that compliance rates at retail could be as low as 50%.

Not only are consumer goods marketers paying for activity that doesn’t necessarily deliver returns, but they are often paying retailers to do something and then not even checking to see whether they actually did it or not. 

Media companies have long tracked the actual delivery of advertising versus a media plan, but in the world of shopper marketing again this seems to be an area which is given less attention. Products go out of stock. Displays do not get set up, are positioned incorrectly, or don’t stay in position for the requisite time period. Activity didn’t get implemented in all the stores. Staff didn’t show up; or didn’t follow the script. It happens all the time.

The consequences of not measuring compliance are far reaching:

  • Precious trade funds are spent on activity that doesn’t actually get implemented – a complete waste of money – research in 2008 by POPAI in the United Kingdom suggested that poor compliance was costing the manufacturers over US$600 million per year.
  • Great ideas which could have delivered are killed off because “they didn’t work”
  • The opportunity to “get it right next time” is missed.
  • The impact of all other elements of a campaign are diluted (the advertising burst that was scheduled to coincide with the in-store campaign, for example.
  • Activities don’t perform as predicted – excessive stocks built based on 100% compliance sit around costing someone money.

So what to do?

Full compliance monitoring through store audits are certainly worth considering, but may not be practical for every budget (though technology is reducing the costs of this dramatically). There are many companies who offer services, and where staff visits stores auditing is made much simpler through the ubiquity of camera phones. At least begin with big activities, activities that are run frequently, or new activities.

For compliance measurement to be truly effective however, it is essential that marketers ensure that really specific standards are in place. A clear standard creates a precise focus on what is important, and makes compliance measurement simpler and clearer.

Measuring every activity against a clear set of metrics is desirable, and arguably should be a mandatory. But getting there is difficult. But surely, if we measure nothing else, we should at least check whether the activity actually happened as we planned it? Another reason to go to stores, if nothing else!

 

Advertisements

Written by Mike Anthony

April 19, 2012 at 9:23 am

11 Responses

Subscribe to comments with RSS.

  1. […] 1 thing you should measure to guarantee an improvement in marketing ROI. […]

  2. […] and marketers are not always better. I blogged recently about the scourge of poor compliance in shopper marketing activities, and across a number of forums […]

  3. […] of terrible in-store execution. I wished I’d had this picture when I wrote my recent blog post on compliance. I have no idea how this happened – there are lots of factors that could have contributed –  […]

  4. Mike, you hit the spot. Lack of understanding between the people in Retailer’s HQ to their people in respective stores is the reason behind this gap. One of the solution from the side of Marketers/Brand owner is to have their own Merchandiser going through all the stores and gather information regarding the activities execution. In one side it’s an additional burden for the marketer for hiring another personnel but the consequences are greater if they don’t.

    Mario

    July 18, 2012 at 10:25 am

    • Hi Mario

      Thanks for the comments. You are right that a lack of understanding is one of the key factors, but in my experience there are many more. Likewise employing an army of merchandisers is one solution – there are others: better selling, better trading terms, better relationships beyond the buyer (see upcoming post on this!)

      the important message however is that marketers must take accountability for this – if execution is flawed then returns aren’t optimized.

      All the best,

      Mike

      Mike Anthony

      July 18, 2012 at 3:16 pm

      • Hi Mike,

        Looking forward for that new post you’re mentioning as the point (better trading terms, better relationship beyond the buyer) are exactly the difficulties we’re experience here where i’m at.

        Out here the buyers have higher bargaining position over marketer/brand owner. Many marketer/brand owner i’m seeing here are being preoccupied on doing activity mainly promotion after promotion because they are paying huge amount of budget to the Retailers under the line of Promotion Support in the Trading term. All the promotion support budget added with cost of space rents, added with additional support budget for opening new stores, anniversary promo etc drives the marketer/brand owner to spend and spend to hopefully earning more volumes in sales.

        This massive promotional activity that’s going weeks after weeks for a whole year could result a poor control and evaluation of the activities and might also be a waste.

        Mario

        July 23, 2012 at 12:06 pm

      • Hi Mario,

        the new blog is posted – though I’m not sure it will really give you enough to fix the situation you are in.

        We work extensively in Indonesia, and I know that many manufacturers find it difficult stand up to a very aggressive retail environment. It is however possible to make a lot of progress despite the difficulties, and we have helped many clients in this area.

        If you have a specific situation, feel free to contact me at mike@engageconsultants.com – I’m not sure I can address too much of this through a blog but I’m happy to chat one-to-one.

        All the best,

        Mike

        Mike Anthony

        July 23, 2012 at 3:23 pm

  5. Hi Mark

    Already read the blog and (unfortunately) that’s precisely the situation we are having today. Thank you so much for the help. I’ll email you shortly if you don’t mind despite your blog’s already give a big help in understanding shopper marketing which is needed desperately here and good to know you’re working extensively here in Indonesia 🙂

    Thanks again,

    Regards
    Mario

    Mario

    July 24, 2012 at 9:54 am

    • Hi Mario,
      Thanks – looking forward to hearing from you soon.

      All the best,

      Mike

      Mike Anthony

      July 26, 2012 at 6:56 pm

  6. […] 1. Focus on compliance If it isn’t executed in the store, then we’re struggling already. […]

  7. […] an intuitive entry advising “shopping is both a functional and a symbolic act”. All hail compliance, Mike Anthony argues that probably the first step in achieving greater ROI is checking to see that […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: